Update on Beer Industry Fair Dealing Act Amendment – Senate Bill 3399

Those of you brewing may want to check your records and ask your distributor what percentage of their volume or gross receipts you represent to find out if this will impact you.

Since we last wrote about Senate Bill 3399, there’s been quite a bit of activity. As introduced, the bill sought to lower the percentage of annual volume stated in subsection 1.5 of Section 7 of the Beer Industry Fair Dealing Act necessary to trigger the arbitration rights granted under the subsection. Presently, the annual volume needed to qualify for the arbitration provisions of the subsection is set at 15% or less – if the beer supplied by the brewer represents 15% or less of the wholesaler’s annual volume for all beer products supplied by all brewers, subsection 1.5 may apply.

The bill originally just sought to amend this to 10%, so brewers falling into the range between 10% and 15% would lose this right. On March 15, Senate Amendment 1 was entered and ultimately passed in late March. This amendment went beyond the 10% shift and augmented the percentage to a factor of the wholesaler’s total annual “gross receipts” for beer rather than the “volume” of beer. The amendment also has a provision stating that its the gross receipts supplied by “the wholesaler to the retailer” – which is language that doesn’t seem to comport with the rest of the section.

In any event, this amended version passed the Illinois State Senate and has gone to the House. On May 1, the House introduced its own Amendment 1, which would amend the bill back to the originally introduced legislation that only changed the 15% to 10% and does not include the other proposed changes from Senate Amendment 1.